Wednesday

Apr 10, 2019 at 12:01 AMApr 10, 2019 at 2:32 PM

The city of Munroe Falls has earned a victory in its legal battle with a Ravenna-based oil and natural gas drilling company.

The Ninth District Court of Appeals recently ruled that Munroe Falls did not engage in "frivolous conduct" when the city asked Summit County Common Pleas Court to declare that it could enforce its zoning laws that deal with oil and gas wells, and to require that Beck Energy acquire a conditional zoning certificate and/or a variance before the it could drill a well in the municipality.

The court of appeals also ruled that the city’s law director had "good grounds" to seek a temporary restraining order against the company in an effort to prevent the drilling from happening.

The appeals court decision overruled Summit County Common Pleas Judge Paul Gallagher’s July 2017 determination that Munroe Falls and Munroe Falls Law Director Tom Kostoff had to pay $45,000 to Beck Energy for "reasonable attorney’s fees and expenses incurred."

In that decision, Gallagher referred to the city’s case seeking declaratory judgment and a temporary restraining order as "frivolous litigation conduct" because, he said, the matter had been dealt with in a 2015 Ohio Supreme Court decision. The city appealed Gallagher’s decision. The July 2017 judgment had been on hold while the appeal was being addressed.

The court of appeals’ decision means neither the city nor Kostoff will have to pay Beck for attorney’s fees and expenses, according to Munroe Falls Mayor James Armstrong.

"Knowing the city had acted responsibly and in the best interests of our residents and the surrounding communities, we are pleased that the court of appeals unanimously agreed with the city and reversed the trial court’s ruling," said Armstrong.

Messages left for Raymond Beck, owner of Beck Energy, and his son, David Beck, were not returned.

The case dealt with a well that Beck ended up drilling on a vacant portion of the Sonoco paper mill property off North Main Street.

The court of appeals on April 3 unanimously ruled that the city’s seeking of a declaratory judgment "was either warranted under existing law, supported by a good faith argument for an extension, modification, or reversal of existing law or supported by a good faith argument for the establishment of new law."

The court concluded that the county court "incorrectly determined that the city engaged in frivolous conduct when it filed its complaint."

The court noted the city said it received a letter from Beck stating the company "intended to ‘immediately commence drilling' of the well once ODNR renewed its permit … considering Beck’s intention to proceed with drilling as soon as it received ODNR approval, we conclude that Mr. Kostoff had good grounds to move for a temporary restraining order."

History of the case

In 2011, the Ohio Department of Natural Resources issued a permit to Beck Energy to allow the company to drill an oil and gas well on North River Road in Munroe Falls. After Beck started drilling, the city issued a stop work order and sought a court order against Beck claiming that the company had not complied with city drilling ordinances, according to court records. Summit County Common Pleas Court granted the order, but the Ninth District Court of Appeals reversed the decision, saying the city's ordinances were pre-empted by state law. The Ohio Supreme Court affirmed the appeals court’s decision.

In 2015, ODNR issued a second permit to Beck to allow the company to drill a well on a portion of the Sonoco paper mill property off North Main Street. The city’s zoning department issued a "stop work order" to try to stop the drilling, according to court records. Beck, in June 2015, filed a complaint with the Ohio Supreme Court challenging the city’s zoning ordinances that the company said conflicted with state law, but the court dismissed the complaint, according to court records.

In April 2016, Beck's ODNR drilling permit expired. The city asked Beck to fill out a zoning application before doing any drilling. When Beck refused, the city, in May 2016, filed a complaint asking the court to rule on: whether the city has the right to enforce its zoning ordinances relative to oil and gas wells within its jurisdiction, whether Beck must obtain a zoning certificate and/or variance from the city before drilling and requested that all drilling activities be suspended.

The city, in June 2016, sought a temporary restraining order to prevent the drilling from starting, and Beck filed counterclaims in response. The court denied the temporary restraining order request and Armstrong said Beck then began drilling at the North Main Street site.

Beck dismissed its counterclaims, but then asked the court to sanction both the city and Kostoff. Galllagher, in July 2017, issued his ruling stating the city and Kostoff had to pay $45,000 to Beck Energy for "reasonable attorney’s fees and expenses incurred."

Reporter Phil Keren can be reached at 330-541-9421, pkeren@recordpub.com, or on Twitter at @keren_phil.